Strategic Investment Decisions for Emerging Technology Fields in the Health Care Sector Based on M&A Analysis

• Main Authors: Jinho Choi, Nina Shin, Yong Sik Chang
• Format: Article
• Language: English
• Published: MDPI AG 2021-03-01
• Series: Sustainability
• Subjects: mergers and acquisitions; emerging technology; emerging industry; health care sector; promising index; promising index sharpe ratio
• Online Access: https://www.mdpi.com/2071-1050/13/7/3644

The existing approaches to identification of emerging technologies create a prominent opportunity for technology convergence and market growth potential. However, existing approaches either suffer from the time lag issue or have yet to explorethe assessment’s uncertainty and ambiguity. Based on a total of 14 years of mergers and acquisitions (M&A) activity data in the Health Care sector, the complex patterns between growth velocity and accelerating of M&A activities are analyzed with two quantitative indicators (Promising Index and Promising Index Sharpe Ratio) to identify emerging technological opportunities. The proposed integrative approach offers a mean to resolve the time lag issue, deal with market trend irregularity, and manage expectations of investors for emerging technology and industry. Specifically, this study aims to (i) provide a decision support system integrating M&A activity information for strategic investment planning and (ii) identify promising technologies in the Healthcare sector to manage the irregularities of market trend and investment outcome. This study is one of the first research that employs a prior data-based approach to delineate emerging technologies by analyzing the growth momentum properties of specific industry areas based on the M&A activity data.